Buying sibling out

captainlongtoes

xylophone said:

Ok, does the house get normally transferred into our names after probate is complete? We’re still sorting that out, so what’s the usual process?

The house remains in the name of the deceased until the executors either transfer it to the beneficiaries or arrange for it to be sold.

You cannot afford to buy out your sibling and intend to sell it. 

You can sell as  executors  - your solicitor will deal with the formalities.
https://www.thegazette.co.uk/all-notices/content/100719
Current CGT allowance  for an estate is £12,300.

Thanks again, this is helpful information  

MovingForwards

It would be worth you posting on the mortgage board to see what the resident brokers say about mortgage possibilities.
You would need to say how many kids you have as that changes affordability, whether you have a partner living with you and if they work, as that would potentially open things up to a bigger mortgage.
If you are paying into a company pension, you may be able to have a longer term than state pension age. Nothing stopping you making small overpayments to bring it back down to state pension age.

Sell the house as it is, have a look on various estate agents websites to see what you can get for your budget and do not transfer this property into your name / siblings name as you lose all first time buyer perks.

getmore4less

Emmia said:

captainlongtoes said:

Emmia said:

captainlongtoes said:

So it looks like we may need to sell, and I find myself a home that I can put the approx £300k towards and hope to be able to obtain a mortgage on the rest? Sorry but beyond the very basics of a mortgage I’m new to all of this

Yes, so you'd have £300k deposit (less fees, stamp duty etc.,) you either buy a property which is covered by the "cash" you have, or you buy a more expensive property with the £300k acting as a deposit and a mortgage. 

Banks will normally lend 3 to 4 times your salary as a mortgage, so you could borrow another £100k - £150k or so, giving you a total budget of £400k - £450k for the purchase.  If you did go for a mortgage, the deposit size means you should have a good choice of mortgages as you'd have a good loan to value ratio (LTV) i.e. a £300k deposit would buy you 75% of a £400k property and you'd borrow the other £100k.

However, given your age, you'd probably only be able to get a shorter term mortgage which will push the monthly payments up affecting affordability, since banks still want their money!

To illustrate, if you borrowed £100k over 15 years on a capital repayment basis, it would cost you £630 a month at an interest rate of 1.7% (you'd pay £13,362 in interest over the 16 years) but if you borrowed the same amount over 25 years it would be £409 with £22,820 in interest over the 25 years. (I'm assuming the interest rate stays the same for the whole period, which it won't). 

You may want to go for a fixed interest rate for an initial period (usually 2, 3 or 5 years) which will give you certainty on the monthly payments, but may initially be more expensive than a variable rate (although if rates rise, you'll benefit in the fixed period)

It's probably worth having a play with some of the affordability calculators to see how the numbers work for you - most banks have them available on their websites.

This is very helpful, thank you! I‘ll have a chat with my sibling and do some more fact finding eg stamp duty, insurance, other fees, etc. I’ll miss this place but at the same time I would very much like somewhere to truly call my very own. 

I'd also say, it is a good idea to do the numbers before you go to a bank or broker - go in knowing how much you want to borrow, and have a good idea of the term and monthly payment you'll be comfortable with, given the lifestyle, hobbies etc., that you want to be able to afford after you've bought your new place. 

I did this, but my husband and the bank's mortgage advisor slightly bullied me into an arrangement (a shorter term) that I was only 75% ok with from an affordability perspective - it's ok now as I've had 2 promotions and a chunky pay increase, but I would have been happier with 22 years, rather than 19 years. 

The basic rule is get the longer term you can and over pay(without hitting any ERC) rather than a shorter term,
bad advice from broker.

getmore4less

If it is getting sold then sell as executors, still a normal sale process.

As you live there as your home that should avoid some of the issues with a probate sale.
one of the main ones is  motivated sellers, make sure you are both on the same page when it comes to value and timescales in particular how to deal with low offers.

Although you live there sibling should share some the load of the clearances and preparing for sale.

You can start the process of selling now.
dress to sell  make it looked lived in and loved(even projects can benefit from that)
Get EA on board ready to market(can start before the grant is issued)
Consult with a broker on affordability and work out yourself how much you would be happy with each month.
start looking for a new property
If staying in the same area at least you know that and have a good ideas of where you may want something and bits you don't.

On the refurb work, there is no requirement to do anything, remember as you live there most of the impact will be on you and unless sibling agrees you don't get extra benefit.

Often best to stick to the simple stuff that makes the place looked after and maintained, freshly decorated when a rewire is needed just raises the whats that hiding question.

The housing board on here is a good place for advice and suggestions  but to get detailed often needs pictures

Emmia

getmore4less said:

Emmia said:

captainlongtoes said:

Emmia said:

captainlongtoes said:

So it looks like we may need to sell, and I find myself a home that I can put the approx £300k towards and hope to be able to obtain a mortgage on the rest? Sorry but beyond the very basics of a mortgage I’m new to all of this

Yes, so you'd have £300k deposit (less fees, stamp duty etc.,) you either buy a property which is covered by the "cash" you have, or you buy a more expensive property with the £300k acting as a deposit and a mortgage. 

Banks will normally lend 3 to 4 times your salary as a mortgage, so you could borrow another £100k - £150k or so, giving you a total budget of £400k - £450k for the purchase.  If you did go for a mortgage, the deposit size means you should have a good choice of mortgages as you'd have a good loan to value ratio (LTV) i.e. a £300k deposit would buy you 75% of a £400k property and you'd borrow the other £100k.

However, given your age, you'd probably only be able to get a shorter term mortgage which will push the monthly payments up affecting affordability, since banks still want their money!

To illustrate, if you borrowed £100k over 15 years on a capital repayment basis, it would cost you £630 a month at an interest rate of 1.7% (you'd pay £13,362 in interest over the 16 years) but if you borrowed the same amount over 25 years it would be £409 with £22,820 in interest over the 25 years. (I'm assuming the interest rate stays the same for the whole period, which it won't). 

You may want to go for a fixed interest rate for an initial period (usually 2, 3 or 5 years) which will give you certainty on the monthly payments, but may initially be more expensive than a variable rate (although if rates rise, you'll benefit in the fixed period)

It's probably worth having a play with some of the affordability calculators to see how the numbers work for you - most banks have them available on their websites.

This is very helpful, thank you! I‘ll have a chat with my sibling and do some more fact finding eg stamp duty, insurance, other fees, etc. I’ll miss this place but at the same time I would very much like somewhere to truly call my very own. 

I'd also say, it is a good idea to do the numbers before you go to a bank or broker - go in knowing how much you want to borrow, and have a good idea of the term and monthly payment you'll be comfortable with, given the lifestyle, hobbies etc., that you want to be able to afford after you've bought your new place. 

I did this, but my husband and the bank's mortgage advisor slightly bullied me into an arrangement (a shorter term) that I was only 75% ok with from an affordability perspective - it's ok now as I've had 2 promotions and a chunky pay increase, but I would have been happier with 22 years, rather than 19 years. 

The basic rule is get the longer term you can and over pay(without hitting any ERC) rather than a shorter term,
bad advice from broker.

I was aware of that when we took the mortgage (the deal allows it) but the husband was obsessed with the actual term length on the agreement, rather than doing the overpayment thing to reduce the term... Although I wasn't entirely happy, it became something not worth battling over, (we also make overpayments now).

However, I made the point, because I've been in mortgage appointments (for a single person mortgage), where the advisor was definitely trying to get me to borrow more than I could really afford.

AnotherJoe

captainlongtoes said:

AnotherJoe said:

One piece of advice, do not have the house transferred into Your and siblings names. There's no need, It can be sold direct. That way you remain a first time buyer and eligible for whatever FTB's are, never having owned a house before. 

Ok, does the house get normally transferred into our names after probate is complete? We’re still sorting that out, so what’s the usual process?

It's hard to say if there's a normal process but in the past it didn't matter too much, because there were no FTB benefits , but now there are and it's an easy gotcha to be stung by. 

It's also going to be mildly more expensive if you use a solicitor because you are paying to have a transfer done when it's not necessary. 

And yes, re rewiring, I'd just make clear that it's priced to allow for rewiring so that if anyone attempts to justify their lower offer  "worth £5k less because needs rewiring" you can point to that.
Not that it matters when people try to justify a low price because it's worth what the market decides, not what someone tries to cleverly argue,  but may take some of the wind out of chancers sales. 

Flugelhorn

If you are going to sell then wait until then to transfer the names, it will be sold by "the execs of Mrs Longtoes" - some properties are like this for ages.